Pro and contra SAP - with or without S/4

The corporate and IT strategy is usually used as the basis and starting point for a transformation, whereby the system architecture (on-prem, cloud or hybrid) also plays a major role. For all variants, the ERP market has changed massively in recent years. Many local providers in the midmarket have been able to reach larger, international companies through cloud strategies and new technologies.

But international U.S. providers such as Salesforce, ServiceNow, and Oracle have also found their way to Europe and broadened their portfolios. For this reason, it is appropriate to take stock of SAP's positioning in the current market environment based on the wealth of information, customer discussions and project experience. On the occasion of its 50th anniversary this year, SAP can still call itself the ERP world market leader. What are the reasons for this success and where is there an urgent need for action?

SAP established a strong market position with the first release R/2 and "customizing". With client-server technology in the R/3 release, the success story really began to pick up speed, and customers can still benefit from the many years of experience.

The deep, holistic business orientation in the development of the standard software across all modules has played a major role. SAP has achieved its goal of becoming the world market leader by programming and providing ongoing support for all local business and tax legislation for over 100 countries and in their languages. This internationalization has also been accomplished for many industry solutions. From my personal point of view and experience, this is one of SAP's greatest strengths compared to the competitors appearing on the horizon.

SAP also recognized very early on that for a software developer, customer communication is crucial for quality assurance. For this reason, the "Online Service and Support System" (OSS) was developed very early on and subsequently expanded in Solution Manager (SM). I think that with this extensive experience, SAP has a big head start in the market and this solution is essential for all customers. 

Unfortunately, this success story is also contrasted by negative developments. Many customers have the subjective feeling that SAP's market position and size have not only made it less down-to-earth, but that the Hana strategy has also made it less customer-oriented.

With the many acquisitions to achieve the necessary growth, the original success feature of a fully integrated standard software was forgiven for the time being in the S/4 environment. The now following S/4 Hana and cloud integration still costs a lot of time and money.

The necessary S/4 technology change with the simplifications of the data fields and the new programming logic have a great impact on the in-house developments. In the course of this, however, the standardization of all software interfaces was unfortunately neglected. This is not state of the art compared to other providers and is not well received by customers. With the S/4 transformation, obsolete technologies are taken along and their implementation itself is very complex and lengthy, which also often leads to questioning of the economic viability. The many S/4 Hana releases lead to uncertainty because of SAP's unknown ERP strategy thereafter.

SAP currently thrives on the "old generation" of existing customers, with the "young generation" of new customers also open to competing solutions. In the various ERP market studies, the background of customer loyalty to SAP would be interesting: Are customers really satisfied with SAP? Or do they just lack equivalent alternatives? Or is a change of provider simply too expensive?